COA stops payment of ‘smart’ license plates

HOT SEAT Transportation Undersecretary Jose Lotilla (Left) talks to Land Transportation Office chief Alfonso Tan Jr. during a lull on the Senate inquiry into the procurement of new license plates. PHOTO BY RENE H. DILAN

PROBLEMS on the issuance of license plates for motor vehicles by the Land Transportation Office (LTO) are seen likely to worsen because the Commission on Audit (COA) has suspended payment of the P3.8-billion cost of the contract.

At the resumption of the Senate blue ribbon committee hearing on Monday, Sen. Joseph Victor Ejercito said the situation could deteriorate if the LTO, headed by Alfonso Tan, would fail to provide the documents being demanded by the COA, which is auditing the multibillion-peso procurement contract.

“If this suspension notice of COA will prosper, it will surely delay further the issuance of the vehicle license plates,” Ejercito told reporters after the hearing.

The COA issued a notice of suspension of payment on April 10, 2015 after the LTO failed to submit several documents being asked by state auditors who are scrutinizing the contract awarded to Power Plates Development Concepts Inc. and Dutch firm J. Knierem BV-Goes (JKG) in 2013.

Based on the Audit Observation Memorandum (AOM) of COA dated November 17, 2014, a copy of which was obtained by The Manila Times, the state auditor enumerated 10 documents that were lacking, among them—a detailed breakdown of the approved budget of the contract (ABC); minutes of pre-procurement conference; result of the bid evaluation; eligibility check/screening; abstract of bids; post-qualification evaluation report; bid security; and other documentary requirements.

During the hearing, Leo Romero, counsel of bidder Marianing and Sons Development Corp., asked the audit body if the LTO had submitted a certificate of availability of funds for the contract.

Romero explained to the committee that under the Procurement Law, two prerequisites are needed to make the contract valid: a certificate of complete appropriation for the project and a certificate of availability of funds.

“If any one of these requisites is absent, then the contact is null and void ab initio [from the start],” Romero said.

Cecilia Camon, COA Director IV, could not categorically say if COA received the certifications.

Ejercito asked Transportation Undersecretary Jose Lotilla, chairman of the 2013 Bids and Awards Committee on the license plates bidding, if his department has submitted the certification to COA. Lotilla refused to answer, saying the matter could be sub judice since there is a pending case at the Supreme Court in relation to the issue.

In the end, Sen. Alan Peter Cayetano moved that a subpoena be issued to compel the COA to submit the notice of suspension of payment to the committee, which was seconded by Sen. Nancy Binay.

The LTO already paid Power Plates-JKG P477 million for mobilization expenses but if the agency fails to submit the documents being demanded by COA within the prescribed time, a notice of disallowance will be issued to the LTO.

The notice of disallowance, in effect, will nullify the contract and Power Plates-JKG will be compelled to return all payments it has received from the LTO.

Tan tried to downplay the suspension of payment order issued by the COA.

He said the LTO had been coordinating with the Department of Transportation and Communications because the documents will be coming from the agency.

Tan added that the COA order will not affect the release of license plates because the supplier continues to produce the plates.

When asked about the poor quality of license plates that the LTO has received, he said the plates were randomly inspected by the Department of Science and Technology (DOST).

Ejercito moved to invite DOST officials to the next hearing to shed light on the matter.

Last week, Edward Fereira, a bidder, told the Senate that the new license plates lacked the security features promised by the Power Plates-JKG on its bid offer.

5 Comments

Bid bond, performance bond, james bond, bond paper..these are all doc for biddings (he he he except the last 2 ). What is the government doing..encash the performance bond of the winning anomalous bidder. Govt Purchasing 101 mantra requires to know your bidders..if they are willing and able to you know what. Ohhh I see..funds to the 2016 election campaign of the incumbent.

In the distant past, nearing election time comes the rush of bank robberies. Now a days, nearing election times comes the rush of anomalies in the government. Better you scum politicos to rob the banks coz they are insured. The insurance claim will be paid by re-insurance companies abroad, hence additional fresh money coming into RP, no loss for Juan DC. Take away government funds intended for Juan DC is more sinister. Got it…now go and assemble your cabal.

we know that already, now then who’s brilliant(?) idea was this anyway? since the findings is quite highly irregular we would like to see them behind bars! is that possible? or it will be just another moro-moro and after all it’s back to their regular thieving again as usual?

It’s more fun in the Philippines..Only in the Philippines wherein every government agencies is involved on anomalous transactions. It’s funny since the President is always saying of his unpopular motto “Tuwid na Daan”. Very ironic….very funny and very dangerous Republic. Anomaly in the government as you can see is from left to right…and right to left…everybody wanted to have share on anomalous transactions.